CEO Stoppelman: Yelp Is Not An Extortion Racket

See? No extortion!
Yelp CEO Jeremy Stoppelman stopped by the New York Times to explain why Yelp isn't extorting people.

Specifically, he explained that when a Yelp salesperson tries to pacify an angry potential small-business client by suggesting that the small business might be able to minimize the impact of a scathing Yelp review by ponying up and highlighting a more positive review instead, it's not extortion.

And it's not.

But one can understand why the business might view it that way. And one can also understand why the business might be mad enough to sue. Especially as Yelp becomes a nationwide powerhouse whose reviews affect business.

And that's presumably why Jeremy stopped by the Times: To explain why what Yelp does isn't extortion. And to explain why some businesses think it is manipulating reviews when it actually isn't.

Here are two highlights of the Q&A:

Q.So what's the incentive to advertise on Yelp?

A. The primary thing our advertisers are purchasing is actually advertising. Depending on what your price level is, you get a certain number of impressions of those ads, both at the top of search and on related business pages. So if you're an Italian restaurant you might show up on a pizza restaurant page or another Italian restaurant page. Beyond that, there are also a couple of enhancements that happen on your business page. You're buying out that ad inventory that would otherwise be on your page. You get a slide show so the photos on your page are a little bigger and rotate. You also get to highlight one review, which is clearly marked as your favorite. That's it...

Q.Have you ever thought to yourself, I'm the most hated man in small business?

A. You can't really feel that way if you have 30 million consumers visiting you every month. I meet business owners all the time, and the reality is they're not all angry. The ones who are calling lawyers or calling the media are upset, but that's not necessarily a representative sample. For perspective, it's important to remember that there are up to 15 million businesses that you can find on Yelp and 10 million reviews. We have tens of thousands of advertisers. We have some lawsuits from a handful, I think 12, local businesses. In the grand perspective, it's really a drop in the bucket.